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MAMMOTH VEIN 


n 


CONSOLIDATED 


COAL COMPANY. 


REPORT OF JOINT COMMITTEE 


AND 


TREASURER’S CIRCULAR. 







APRIL 24, 1 866. 


BOSTON: 

PRINTED BY ALFRED MUDGE & SON, 34 SCHOOL STREET. 

1866. 




































Stockholder, 


Iftammatlj Hein Cnnsolitmteb Coal Co. 


Dear Sir : 

The Directors have found themselves compelled to assess the 


stock of the Company to the amount of ten dollars per share. 


The Report of a joint committee of Directors and Stockholders, 
appointed November 30th, 1865, is annexed, as showing the 
condition of the Company on January 1, 1866, when a general 
account of Stock and Inventories in detail of all the property 
of the Company were taken. At this time the debt of the 
Company amounted to $433,945, taking at their full par value 
the outstanding Bonds issued in August last, at the rate of eighty 
cents on the dollar. 

The origin and growth of this debt are easily accounted for and 
traced. The Company commenced its operations in June, 1864, 
with a cash working capital of $175,000, an amount which in the 
unfinished condition of the property was quite inadequate to its 
needs. After little more than a couple of months’ working of 
but a small portion of the collieries, and having at that time 
already expended in Construction and Improvement accounts at 
the least $102,000, and probably more, it paid out in Cash 
Dividend and Tax thereon, $210,500. In consequence of having 
thus been at so early a day deprived of working capital and 
run into debt, and of subsequent unavoidable expenditures in 
construction and improvement, the Company has been sub¬ 
jected to the payment of large sums of money in interest, and 
has in addition, of necessity, incurred the many and varied 
losses, that must, as every business man knows, result, directly 
and indirectly, to a concern thus thrown into financial discredit. 




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The Company has expended to January 1, 1866, $366,000 in 
Construction account, or in other words, in slowly and gradually, 
and by heavy continuous outlay, bringing the property into a 
condition of completeness and productive capacity, approaching 
the representations on those points made to the Stockholders 
in June, 1864. 

The Company has also expended in cutting the 214,466 tons 
of Coal which were in the various Collieries, as ascertained by 
actual measurements made January 1, 1866, probably the sum 
of $150,000, which amount being equally with money charged 
to Construction account, spent in necessary improvement of the 
property, should be added to the Committee’s Statement, No. 1. 
The whole amount of the Coal cut, and on the bank, at the 
various collieries, as ascertained by the measurements referred 
to was as above. 214,466 tons, and valued in all at $215,566; 
of this amount $150,000 only is claimed as addition to the value 
of the property made by the Company, in order to insure ample 
allowance for such quantity of coal as may have been already cut 
in the collieries when they came into the Company’s possession. 
As no previous measurements had been made, the statements on 
this subject heretofore having been merely matter of estimate 
and opinion, the quantity of cut coal in the collieries at the outset 
cannot be arrived at with strict accuracy: it is believed to have 
been considerably less than the amount allowed for it above. 

It is thus seen that dividend and tax, construction account, 
cut coal, interest and extra interest have sufficed to absorb the 

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working capital and the profits of the business, and to create 
the debt under which the Company has been laboring, and which, 
in order to protect themselves and their property, the Stock¬ 
holders are called upon to remove. 

It is not asserted that $400,000, the amount of the assessment 
called for, will supply to the Company such working capital as 
it would be desirable to have for the most safe, advantageous 
and profitable conduct of its business; it is believed, however, 


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that with such a weight of debt removed, the business may be 
conducted with safety and with profit, and that the future earnings 
of the Company, and the better credit it will possess, should 
in time supply all else needed in this respect. It is to be borne 
in mind that this debt is not all due at the present time; 
$100,000 of it averages due in eleven months from February, 
1866; other $153,000 is in the Bonds of the Company, which, 
if retained until maturity, will return to the holder an interest 
of about fifteen per cent, per annum, a considerable proportion, 
therefore, may remain outstanding; of the balance of the debt 
it is probable that such amount as the interests of the Company 
require may be continued on favorable terms. 


The present condition of the Company’s property is the point 
of immediate interest and importance. 

The Collieries are now at last, after this lapse of time and 
very heavy expenditure, in good working order, worth, it is 
believed, fully one half more than when they came into our 
possession, and with capacity for a largely increased and 
increasing production of coal, and at rates low enough to enable 
the Company to meet successfully the competitions of this busi¬ 
ness ; the coal covered and controlled by our leases is believed 
to be practically inexhaustible, and of quality not surpassed in 
the Anthracite region. As regards the important question of 
transportation, the Company is believed to have facilities supe¬ 
rior to many, and fully equal to those possessed by any other 
establishments throughout the region. During the very much 
broken and interrupted year of 1865, the Company shipped 
179,586 tons of coal, shipping in the four months of August, 
September, October, and November, 107,819 tons, and in the 
month of November alone, 30,848 tons; if subjected to no un- 
foreseen unavoidable interruptions, the shipments of 1866 should 
be double those of 1865. 


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The necessary heavy expenditures of the Company are gone 
through with, the unfinished collieries finished, breakers built, 
remodeled, and repaired, slopes sunk, gangways driven, breasts 
opened and filled with coal, and no reason is known, why with a 
good management and careful economy, the results of the Com¬ 
pany’s future business should not prove as largely remunerative 
as those of any of the best coal operations in Pennsylvania. 

The Directors have full confidence and express their entire 
satisfaction in Mr. James Neill, the agent in Philadelphia, and 
Mr. William H. Sheafer, the agent in Pottsville and at the 
Mines: they believe those gentlemen to be both well qualified 
for their respective positions, and to be devoted to the Com¬ 
pany’s interests. 

The Inventories of property at the mines are believed to have 
been carefully made, and the property specified therein to be 
estimated at their cash values as near as possible. The Inven¬ 
tory referred to in the Committee’s Statement, No. 2, comprises 
all the property of the Company at the mines, both above 
ground and under, and necessarily, therefore, includes improve¬ 
ments which cannot be separated from the land, as, for instance, 
slopes, gangways, airways, etc., etc. These are all, however, 
essential parts of the collieries, requisite to their operations, 
and adding to their value, and were they not in existence must 
be created by the Company, and, it is believed, at an expendi¬ 
ture equal to or exceeding the sums stated in the Inventory. 

The Inventory referred to in Committee’s Statement, No. 3, 
was made at the same time and in similar manner, but differs 
from the other in its omission of those fixed immovable improve¬ 
ments already alluded to. Both these Inventories, in full detail, 
are open to examination by the Stockholders. 

Neither in the Statements of the Committee nor in the 
Inventories is any allusion made to the value of the Com¬ 
pany’s leases; these are represented as being, and are 
believed to be, of large value, as covering, for terms of varied 


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duration, valuable mining privileges at rates of royalty consid¬ 
erably lower than have since ruled, and been obtained in the 
Anthracite regions. 

As to the profits of the business, as given in Statement No. 5; 
if it is desired to estimate fairly the prospects of the Company’s 
future business, full and sufficient allowance must be made for 
the unfinished condition of the property when it came into our 
possession, and the loss of time and heavy expenditures unavoid¬ 
ably consequent; for the embarrassed state of the finances, 
and the many and varied losses, disadvantages, and interruptions 
necessarily resulting; also, for long and expensive inaction 
during the strike throughout the region in the summer of 1865. 
Had the property been, in June, 1864, in such condition as 
was then represented, it is believed that the results of the 
business for that year and the year following might have ap¬ 
proached the results promised as inducement to subscription. 
In its actual condition at that time, that these promises could 
have been in any way realized was simply impossible. 

The Committee’s Report not having been made until April 
23d, the absence of several of the Directors, and the earnest 
desire of the Treasurer to present their report to the Stock¬ 
holders at as early a day as possible, has induced him to do so in 
advance of its submission to the Board. The same is the fact 
also, and from similar causes, in regard to the present circular. 

A. B. ALMON, Treasurer. 

Boston, April 24, 1866. 


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To the President and Directors of the 

Mammoth Vein Consolidated Coal Co.: 

Gentlemen, — The undersigned, appointed a Committee by 
the Directors of the Mammoth Vein Consolidated Coal Company 
to look into and report upon its condition, transmit the same 
herewith, together with the subjoined Statements numbered One 
to Five, inclusive, to which they beg leave to refer, and also to 
the Inventories from which these Statements are made. 

The Committee fixed upon the 1st of January last as the 
point of time to which they would bring their report, and accord¬ 
ingly have made up their balances to that date, as shown by the 
trial balance of the late Treasurer, and the statements of the 
value of the properties as furnished to the Committee by full 
Inventories of all the Company’s property in Pennsylvania. 

The different Statements, as will be readily perceived, are 
made with different and distinct objects in view, and it is hoped 
are sufficiently clear to be understood at once. Of course, it is 
not expected that we undertake to demonstrate the exact value 
of this property, — the absurdity of such an attempt is apparent 
to all, — but simply to show, as near as we are able from such 
sources as are within our reach, the financial situation of the 
Company at that date, giving its liabilities and its assets, and 
placing them in such varied form before the Board that those 
interested in their examination will have the data from which to 
make estimates for themselves. 

These Statements are made by the Committee from the “ Trial 
Balance ” and the “Inventories ” of valuations of property at the 
Mines, before referred to, and although they have no reason to 
question their accuracy and entire reliability, they deem it proper 
to state from what sources the material for these exhibits has 
been derived, and that they are not vouched for as correct within 
the personal knowledge of the undersigned; such examination, 


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however, as it has been in our power to make of the estimates 
themselves, leads us to regard them as fairly made, and with no 
design to deceive or over-estimate. 

. No estimate is made in any of these Statements of the value of 
the u Leases” as an item; only the property and improvements 
thereon being valued, and if any sum is fixed upon as represent¬ 
ing such value it is to be added. 

Without attempting to explain or discuss the causes that have 
produced results so different from the anticipations of those who 
invested their money in this Company, it may not be out of place, 
in presenting these exhibits, to remark that during the time the 
mines have been worked by this Company, many unforeseen and 
unexpected interruptions have occurred in the prosecution of the 
work at the collieries, and several of them have hardly been 
worked at all, while heavy expenditures for improvements were 
being made, which could not be omitted if we were to make pro¬ 
ductive, the amount already invested; and while the undersigned, 
in common with all who are interested, regret the necessity for 
such outlays, they feel satisfied it is sound policy. It is probable 
that up to the present time not more than one-third of the capac¬ 
ity of the Collieries has been attained. 

OLIVER DITSON, 

CHAS. G. NAZRO, 

JOHN H. THORNDIKE, 

WM. T. HART, 

Committee of the Directors, 


Boston, April 23d, 1866. 


8 


Statement IVo. 1. * 

Of Cost of the Collieries as shown by the Subscriptions 
paid in and the Accounts of Disbursements for Perma¬ 
nent Improvements by the Company : 

40,000 Shares at $40 per share is, $1,600,000 

less : 

Dividend paid of $5 per 

share, . . . $200,000 

Tax on same, . . 10,000 

Paid to Trustees to be ex¬ 
pended in new Shaft at 

Hickory Mine, . . 100,000 

-$310,000 

$1,290,000 00 

Paid by the Company from General 
Fund for Construction and Perma¬ 
nent Improvements per account, 366,334 43 

Paid from the $100,000 Fund by the 

Trustees as per account rendered, 45,224 13 

- 411,558 56 

Balance of the $100,000 Fund remaining with the 

Trustees to be expended on the Shaft, . . 54,775 87 


$1,756,334 43 









9 


Statement IVo. Q. 

Showing the Appraised Value of the Collieries with the 
improvements as per Inventories . 


Charles E. Smith Colliery, . 

. 8194,965 86 

Tuscarora “ 

105,761 61 

Locust Gap “ 

59,055 72 

A. S. Wolf 

83,340 04 

Locust Mountain “ 

213,835 67 

Hickory “ 

395,247 35 

Wadesville Shaft “ 

50,638 00 

Mahanoy Valley “ 

179,535 81 

Stable Property and General Office, Pottsville, 2,920 25 


81,285,300 31 

“ Leased Property,” composed mainly of tene- 

ments on hand, when leased, . 

90,143 19 

Balance of Shaft Fund in the 

hands of the 

Trustees unexpended, . 

54,775 87 


81,430,219 37 


The above shows the Estimated Value of these properties, 
including the improvements upon them as given in the Inven¬ 
tories from which they are taken, but not putting, any estimate 
upon the Value of the “Leases.” 


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Statement No. 3- 

Showing the appraised value of the personal property of 
the Collieries , without estimating the value of the 
66 Leases ” or the improvements, as per Inventories same 
date: 


Charles E. Smith Colliery, .... 
Tuscarora “ . 

Locust Gap “ 

A. S. Wolf “ 

Locust Mountain “ 

Hickory “ . . . . 

Wadesville Shaft “ 

Mahanoy “ . 

Stable property and general office, Pottsville, 


$163,493 36 
38,362 94 
36,432 12 
60,526 29 
157,557 69 
249,871 03 
19,263 83 
142,291 01 
2,920 25 


$870,718 52 

Leased Propeety, mainly tenements on the prem¬ 
ises when leased, ...... 90,143 19 

Balance of Shaft Fund in the hands of Trustees un¬ 
expended, ....... 54,775 87 

$1,015,637 58 


The above shows the Estimated Value of the personal pro- 
perty connected with these Mines, as per the Inventories; but 
includes nothing for the value of the “ Leases ” or for the cost of 
permanent improvements made in them. 










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Statement No. 4. 

Of the Company s Debt on the ls£ of January, 1866, as 
per Trial Balance of that date after deducting sums 
available for its reduction : 


Bills Payable, 
Demand Loans, 
Bonds Payable, 

it 


. $350,000 

82,000 


6134,050 

19,000 

- 153,050 


6585,050 00 


LESS. 


For Cash on hand, pr. book . . 63,722 14 

“ balance of James Neill, agent, account 
as rendered, due Company for Coal 
sold, ..... 64,677 33 


“ balance account W. H. Sheafer, agent 

at the Mines .... 14,283 05 

“ Bills Receivable, being notes for Coal 

sold, in hands of the Treasurer . 35,421 53 

“ amount of Coal on hand in Philadel¬ 
phia as estimated Jan’y 1st, 1866 33,000 00 

- 151,104 05 

6433,945 95 


It will be understood, of course, that the item of $33,000 
(for amount of coal in Philadelphia) would not appear in 
the Trial Balance, but as it is property on hand* and available 
for the payment of debt, it was deemed proper to place it with 
other quick assets. 









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Statement IVo. o. 


Of Finances to January ls£, 1866. 


RECEIVED. 

From Subscribers, 40,000 Shares, at 

$40.00 each, . . . $1,600,000 00 

From other sources, being amount of 
the present nett debt of Co. per 
Statement, 


433,947 00 


Nett Profits derived from sales Coal, 
over and above the amount paid in 
by the subscribers, and the present 
debt and expenses, including extra 
interest, &c., &c., as shown by 
the trial balance and accounts, 


PAID. 


2,033,947 00 


To Balance, 212,655 00 


$2,246,602 00 


For Seven Collieries, as per Statement, $1,325,000 00 

“ Sinking Shaft at Hickory Mine, by 
depositing with Trustees for that 
purpose, .... 

“ Permanent Improvements on the 
various Mines as per the account 
of same, .... 

“ Dividend of $5 per share and Tax 
on same, .... 

“ Estimated cost of mining 214,466 
tons of Coal now in breasts per 
estimate, and ready for delivery 
at mines, .... 

“ Discount of 20 per cent, on $153,- 
050 00 in Bonds out, the debt 
being face of Bonds, 


100,000 00 

366,000 00 
210,526 00 


214,466 00 


30,610 00 


$2,246,602 00 










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Statement Additional. 

Treasurer's , from Statements by Committee . 

Amount of Inventory, as by Committee’s 
Statement No. 2 (no addition made 
for value of Leases ), . . $1,430,219 37 

Deduct valuation of Leased Property, 90,143 19 

$1,340,076 18 

Say amount Valuation by Inventory, . $1,340,000 00 

Capital Stock, 40,000 Shares, say at $33.50 per 

Share, .$1,340,000 00 


Amount Valuation by Inventory, as above, . . $1,340,000 00 

Amount of Debt, as by Committee’s 

Statement No. 4, $585,050 00 

Deduct available assets, . 151,104 05 

$433,945 95 


Say Amount of Debt, $440,000 00 


Valuation by Inventory, in excess of Debt, and exclu¬ 
sive of Leases, ....... $900,000 00 

Capital Stock, 40,000 Shares, say at $22.50 per 

Share, ........ $900,000 00 
















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